Kentucky Employment Law Blog

"Grandpa," "Dinosaur", "Over the Hill," "Old and Fat"; Tell-Tale Signs of Age Discrimination

Dennis Willard, by the account offered by the Sixth Circuit, is "a successful, veteran car salesman," who ranked in the top 125 of Ford's 3,500 national salesforce. He was 63, when he was fired, and probably it could be found driven, abrasive, pushy and better at his job than any of his co-workers were at their job. The car dealer trumped up a reason to try and justify his firing. The district court, Hon. Arthur J. Tarnow of the Eastern District of Michigan, blew it and granted summary judgment to Willard's employer. The Sixth Circuit corrected this error and reversed the district court in Willard v. Huntington Ford. This is a textbook age discrimination case.

First, as noted above, Willard is a successful and veteran car salesman. Willard's success yielded further benefits: he regularly earned $100,000+ annually than his younger colleagues and he was awarded placement at a sales desk right at the front door, giving him first crack at new customers. Second, while Willard had a reputation for being pushy (a co-worker described him as an "abrasive bully"), he worked in an environment the Sixth Circuit described as "anxiety-provoking and intense" where "interpersonal friction" and "raised voices" flared occasionally. Willard was the oldest of the full-time new car salespersons, a fact that rubbed wrong his supervisors, who inquired of his retirement plans, insulted him with references such as "grandpa," "dinosaur," and "over the hill," while slowing down his transaction paperwork to favor younger salespersons. Willard was welcomed to leave when he complained of this mistreatment. The supervisors apparently believed Willard's desk right at the front door presented an unfavorable first impression, as he was told he was "too old to be sitting by the door" and that "younger salesmen" should have the spot, a comment made tellingly the week prior to Willard's firing. The supervisors also took pains to ridicule Willard in front of co-workers, describing him as "old and fat."

Willard was fired in December 2016 (about 3 1/4 years before the Sixth Circuit's ruling on appeal that he was entitled to a trial; is justice delayed justice denied?), and the employer cited Willard's disciplinary history as some justification for his firing. One prior instance in Feb. 2011 involved an instance where he blew up on the sales floor and cursed his supervisor, receiving a half-day suspension. In August 2012, he'd been suspended for a day and a half for forging a customer's signature on a transaction document, something that was completed properly. The final incident came when Willard complained to a co-worker regarding her mishandling of a transaction he'd put together, and she, according to the employer's general manager, escalated the situation to a slight physical altercation and eventually resigned. Willard was suspended initially for a week and then fired with the employer claiming that he did not show back up for work when scheduled. Willard's desk spot was assigned to a 56 year old colleague and, a mere month later, a 52 year old salesman was hired.

The Sixth Circuit began its analysis by considering the fourth factor of Willard's prima facie case, whether he'd shown "circumstances that support an inference of discrimination." Willard accomplished this in two ways: evidence that he was replaced by a younger new-car salesperson and that younger salespersons were treated better. The dealer's employee census showed the replacement since the hiring restored the number of new car salespersons to the number as of Willard's firing. The employer's argument that too much time (about a month) passed to show the new hire replaced Willard was rejected summarily: "If a month is too much time by Huntington Ford's account, what is not?" There was evidence that Willard's sales manager regularly slow-walked his transaction paperwork compared with how he handled that of Willard's younger counterparts, and this preferential treatment was sufficient to support an inference of discrimination at the prima facie stage.

Since the employer articulated a non-discriminatory rationale -- Willard failed to report back to work, his confrontation with the former employee who escalated the situation alone justified his firing and he had a disciplinary record -- the court then moved considering whether Willard had presented evidence that these reasons were false and untrue, that they were lies offered in a attempt to obscure age discrimination.

The Sixth Circuit rejected the first, because Willard testified in his deposition that he was not informed when he was to return to work following his suspension. The district court had failed to credit Willard's testimony, causing the Sixth Circuit to observe that a "plaintiff's opinion testimony is evidence, and it is for the jury to determine its relative truth and weight." Willard's "excellent" attendance record also cast further doubt on the employer's claim that Willard failed to show up for work when expected; an assertion contrary to Willard's established record as a high achiever.

As to the second reason -- the confrontation with the other employee -- the Sixth Circuit found that the record indicated the other employee "was at fault" and that Willard had acted to de-escalate the incident. The explanation was also undercut by the employer's president's testimony that he was unsure whether Willard would have been fired had he come back to work when the company claimed he was supposed to. This equivocation is contrary to the assertion that the incident required Willard's firing.

The court concluded that the employer's reliance on Willard's supposed disciplinary history, because the last incident for which he was disciplined was four years earlier. In the interim, Willard received sales awards from the dealer and from Ford. The court also cited its prior decision, Vincent v. Brewer Co., 514 F.3d 489 (6th Cir. 2007), where it concluded that a 5-6 week delay between the employer's adverse action and the last incident of supposed employee misconduct was indicative of pretext.

The statements -- those referring to Willard as "dinosaur," "grandpa," "over-the-hill," and "old and fat" -- by the employer's managing agents, who participated in the decision-making process to fire Willard, were either "an overtly negative comment about Willard's age or an ageist slur," and the retirement comments required "only a miniscule inference" to conclude they evidence an age bias and "a wish that Willard no longer work at" the car dealership.

And so Willard's case was sent back to the district court for trial, which seems unlikely to occur before 4 years have lapsed from when Willard was fired.

The Sixth Circuit's opinion was authored by Judge Karen Moore and joined by Judges Raymond Kethledge and John K. Bush.

Robert L. Abell
www.RobertAbellLaw.com

 

RICO Claims Can Arise from Wage Theft Scheme, Sixth Circuit Rules

Employees at Vitale's Italian Restaurants kept two timecards, "one reflecting the first forty hours of work, and the other, reflecting overtime hours. The employees were paid via check for the first card and via cash for the second. The pay was at a straight time rate on the second card, although it reflected hours worked in excess of forty hours in a week." As a result, "employees were deprived of overtime pay, and Vitale's did not pay taxes on the cash payments." This was the context for the Sixth Circuit's decision in Torres v. Vitale, which held that the plaintiff-employees could pursue a civil RICO claim regarding the employer's failure to pay social security and other taxes for the work time for which cash was paid.

The Sixth Circuit, in an opinion authored by Judge John K. Bush and joined by Judges Raymond Kethledge and Julia Gibbons, reversed a dismissal order by Western District of Michigan Judge Paul Maloney. The employees had sought recovery of their unpaid overtime by way of suit under the Fair Labor Standards Act (FLSA). The Sixth Circuit ruled that FLSA precludes RICO claims "to the extent that the damages sought are for unpaid minimum or overtime wages." This preclusion, however, does not extend to damages distinct from unpaid wages or overtime:

when a RICO claim ... is based on a dispute between an employer and an employee alleges damages that are distinct from unpaid wages, even if the RICO-predicate act arises from conduct that also violates the FLSA, then the RICO remedies do not fall within the ambit of the FLSA's remedial scheme and are therefore not precluded.

Based on this analysis, the Sixth Circuit affirmed dismissal of RICO claims premised on the employers' "wage theft scheme." Dismissal of a RICO claim alleging a "workers compensation insurance scheme" by the employer "benefitted by falsely reporting payroll to its insurance company, thus lowering its premiums" was also affirmed because the insurance company, not the plaintiffs, was the victim of that scheme. However, a RICO claim arising from "a tax evasion scheme through which [plaintiff] and other similarly-situated Vitale's employees were deprived of the employer's half of social security payments, and were then subjected to tax liabilities" was reinstated and remanded to determine whether the plaintiff had "pleaded cognizable damages separate from lost wages so as to state a viable RICO claim." 

This case was well-lawyered for the plaintiff by Robert Alvarez of Wyoming, Michigan.

Robert L. Abell
www.RobertAbellLaw.com

Constructive Discharge Doctrine in the Sixth Circuit

In an opinion straining at the bit to express hostility toward the Americans With Disabilities Act (ADA) as mildly as possible, the Sixth Circuit suggested that it is ready to re-examine its subjective intent requirement in constructive discharge cases. The case is Tchankpa v. Ascena Retail Group.

As to the first point, the opinion authored by Judge John Nalbandian takes pains to assure readers and possible litigants that it brooks no favor to the ADA or to employees suffering discrimination as a general matter, here's a sampling:

• The ADA is not a weapon that employees can wield to pressure employers into granting unnecessary accommodations or reconfiguring their business operations. Instead, it protects disabled employees from disability -related mistreatment – no more, no less.
  
  
• As Milton put it, “The mind is its own place, and in itself/ Can make a Heav’n of Hell, a Hell of Heav’n.” Our job is to confirm that the plaintiff’s work conditions were indeed hellish, or at least close to it.

Sixth Circuit law on constructive discharge is straight-forward. The existence of a constructive discharge “depends upon the facts of each case and requires an inquiry into the intent of the employer and the reasonably foreseeable impact of the employer's conduct upon the employee.” Smith v. Henderson, 376 F.3d 529, 533 (6^th Cir. 2004). An employer's intent can be shown “by demonstrating that quitting was a foreseeable consequence of the employer's actions.” Moore v. KUKA Welding Sys. & Robot Corp., 171 F.3d 1073, 1080 (6th Cir. 1999). This Court has stated that the ultimate question in a constructive discharge case is whether a reasonable person would have continued working in the job given the terms and conditions intentionally established by the employer. Easter v. Jeep Corp., 750 F.2d 520, 522-23 (6^th Cir. 1984).

The opinion suggests that the Supreme Court may have upended the employer's intent element of this proof in Green v. Brennan, 136 S.Ct. 1769 (2016). This seems a red herring and betrays a poor grasp of this area of law. If an employer knows or should know that it is compelling an employee to work in conditions in which a reasonable person would not continue working, it is fair to conclude that the intended the employee to quit. If the employer did not know of the condition or situation, it would seem incongruous that it should be held liable to something it knew nothing about. The Sixth Circuit's discussion of Green just goes off on a tangent to no discernible purpose. More troubling is the suggestion that a constructive discharge may require "hellish" work conditions, as opposed to that merely a reasonable person would find intolerable.

We should also note that the ADA does require in appropriate circumstances employers to adapt and change their operations to accommodate a disabled employee; see Does the ADA Require an Employer to Rethink its Processes?

Robert L. Abell
www.RobertAbellLaw.com 

 

Racism In Action at JPMorgan Chase

Last year JPMorgan Chase reached a $24 million settlement in a race discrimination case in which financial advisors claimed that "the bank practiced “uniform and national in scope” discrimination against African-American financial advisors, such as assigning them to poorer bank branches, understaffing them, and failing to include them in a program for richer clients," as reported by Fortune Magazine, "JPMorgan Chase Settles Lawsuit Claiming 'Uniform and National' Racism for $24 Million."

The New York Times today publishes a story today suggesting that racial discrimination both against customers and employees remains a practice at JPMorgan Chase: "This Is What Racism Sounds Like in the Banking Industry." 

Robert L. Abell
www.RobertAbellLaw.com

 

Independent Contractors vs. Employees; the Sixth Circuit Analyzes the Issue

Whether a worker is an employee or an independent contractor is a threshold question with regard to overtime: employees have to be paid overtime and independent contractors do not. The Sixth Circuit uses what it calls the "economic reality" test to distinguish between employees and independent contractors; there is no bright-line test, only an amalgam of factors to consider and apply in varying factual scenarios. The recent case of Acosta v. Off Duty Police Services illustrates.

Off Duty Police Services (ODPS) offers private security and traffic control services in and around Louisville, Kentucky. A typical work day might consist of "sitting in a care with the lights flashing or directing traffic around a construction zone." Both active, sworn police officers and nonsworn individuals work for ODPS doing the same type things; the sworn police officers are paid more and many people had worked regularly for ODPS for over a decade.

When someone needed ODPS's services they would go through a scheduler, who, in turn, would contact workers who met the needed qualifications. The workers could either accept or reject the offer, but there was important evidence that anyone declining a job offer would be punished, which meant no offers would be forthcoming for a while, a practice referred to as being placed in "time out."

ODPS provided some gear and equipment, but the workers had to provide some of their own, an example being an ODPS-branded shirt, the cost of which was deducted from their pay. They had to provide their own police style vehicles, which cost the nonsworn workers from $3000 to $5000.

There was minimal supervision by ODPS. At the job site, the workers had to follow the customer's instructions and wear a uniform; they were subject to grooming restrictions which were enforced occasionally.

The workers were required to sign "independent contractor agreements" when they started working for ODPS; these agreements included noncompete provisions.

The district court ruled that the sworn police officers were independent contractors, while the nonsworn personnel were employees. The Sixth Circuit reversed as to the former and affirmed the latter.

The "economic reality" test applies six factors: 1) the permanency of the relationship between the parties; 2) the degree of skill required for rendering the services; 3) the worker's investment in equipment or materials for the task; 4) the worker's opportunity for profit or loss, depending on his skill; 5) the degree of the alleged employer's right to control the manner in which the work is performed; and, 6) whether the service rendered in an integral part of the alleged employer's business. We turn to these from the easiest to the most difficult.

1. Integral Part of the Business - this asks whether the worker is doing what is the company's business, or could the company function without the services the workers provide. Since ODPS was about and only about providing the services the workers provide, this "factor cuts heavily in favor of finding an employment relationship between ODPS and all its workers."
   
2. Degree of Skill Required - ODPS required only a four hour training session for its workers, a reality favoring "employee status for all of ODPS's workers."
   
3. Investment in Specialized Equipment - This factor compares the worker's and the company's total investments. The biggest cost to the workers was the police-style vehicles that the nonsworn individuals had to obtain, which cost about $3000 to $5000, an amount, as the district court found, paling in comparison to ODPS's annualized business expenses of around $200,000.
   
4.  Permanency of the Relationship - although intermittent, at least theoretically, many of the ODPS's workers worked only for it and many more had worked for it for well over a decade. The permanence factor favors employee status.
   
5. Opportunity for Profit or Loss - This considers whether the worker can get better at his job such that he can make more money doing it than someone else can. This weighed in favor of employee status, because "ODPS's jobs required limited skill, experience or initiative" and, in any event, the workers received a set hourly wage.
   
6. Right to Control the Work - This requires consideration of whether the company tells the worker how and when to do the job. The practice of punishing the worker (placing them in "time out"), the noncompete provision in the contracts and the dress and grooming policies tipped the analysis in favor of employee status for the nonsworn individuals but was in equipoise for the sworn workers.

Robert L. Abell
www.RobertAbellLaw.com

 

 

Wage Theft from Carwash Workers; The Little Guys Win One

Workers at New York City area car washes have recovered about $8.5 million in a wage theft case, the New York Times reports, A Multi-million Dollar Payoff at the Carwash.

A musical tribute:

Every now and then the little guys win one ... and Justice for All.

Robert L. Abell
www.RobertAbellLaw.com

Disability Discrimination Claim May Be Pursued under Equal Protection Clause, Sixth Circuit Rules

A claim founded on disability discrimination may be pursued as a denial of equal protection of the law and pleaded under 42 U.S.C. § 1983 the Sixth Circuit ruled recently in Bullington v. Bedford County, Tennessee. 

Kaleena Bullington worked for the county sheriff's department as a dispatcher for over 8 years but fell ill with Hodgkin's Lymphoma and the necessary chemotherapy had some debilitating side effects. She claimed that the county discriminated against her based on the disabilities caused by the cancer and related treatment.

Bullington pleaded a claim of disability discrimination under the Americans With Disabilities Act (ADA); she also pleaded that disability discrimination denied her equal protection of the laws guaranteed by the Fourteenth Amendment and made this claim under 42 U.S.C. § 1983.

The Sixth Circuit held that Bullington "may assert an Equal Protection claim for disability discrimination under § 1983." 

Judge Moore authored the Sixth Circuit's opinion and was joined by Judge Clay. Judge Kethledge, a recent contender for a Supreme Court appointment, concurred stating that "nothing in the text or structure of the ADA supports preclusion of a parallel constitutional claim. ... reason enough to hold that such a claim is not precluded." 

Understand that Bullington's Equal Protection claim for disability discrimination is an alternative to one made under the ADA but is not a good alternative for at least two reasons: (1) she would have to show that "there was no rational basis for the state action that treated her differently because of her disability," a proof requirement akin to showing that disability discrimination was the sole factor in the differential treatment as opposed to a substantial factor; and, (2) the state's duty to accommodate a disability under the Equal Protection clause is likely lesser than under the ADA. 

Robert L. Abell
www.RobertAbellLaw.com

 

Tender-Back Doctrine Inapplicable to Title VII and Pregnancy Discrimination Claims, Sixth Circuit Rules

The common law tender-back doctrine does not apply to Title VII and pregnancy discrimination claims the Sixth Circuit ruled recently in McClellan v. Midwest Machining Inc.

Jena McClellan had established herself pretty well as a telemarketer at Midwest Machining until she had to report that she was pregnant. Her supervisor commenced a litany of negative comments and, about three months later, she was fired. When McClellan was fired she was made to meet with the company president, Philip Allor, who, McClellan claimed, pressured her into signing an agreement releasing all her claim in exchange for $4,000.  McClellan did sign the agreement.

McClellan was paid the severance money and later filed a pregnancy and sex discrimination lawsuit. About three weeks after the suit was filed and before any answer was due, McClellan paid back the $4000 she'd been paid to release her claims. The district court allowed limited discovery  as to whether McClellan had entered the severance agreement knowingly and voluntarily. The corporation moved for summary judgment; although the district court observed that there were disputed issues of fact regarding whether McClellan had entered the agreement knowingly and voluntarily, it gave the corporation a summary judgment because McClellan didn't pay the $4000 back before she filed suit.

The "tender-back doctrine" is from contract law and holds that "contracts tainted by mistake, duress, or even fraud are voidable at the option of the innocent party" but "before the innocent party can elect avoidance, she must first tender back any benefits received under the contract." But if the innocent party fails to do so within a reasonable time of learning that she can rescind the contract, she ratifies the contract and makes in binding.

The Sixth Circuit reversed, explaining that "requiring recently-discharged employees to return their severance before they can bring claims under Title VII ... would serve only to protect malfeasant employers at the expense of employees' statutory protections at the very time that those employees are most economically vulnerable" and held that "the tender-back doctrine does not apply to claims" brought under Title VII.

Robert L. Abell
www.RobertAbellLaw.com

Is Proof of Discriminatory Animus Necessary for a Disability Discrimination Claim?

Does a plaintiff have to prove that an employer had a particular animus toward employees with disabilities to sustain a disability discrimination claim? "No" answered the Sixth Circuit in EEOC v Dolgencorp LLC. We discussed this case in an earlier post, Failure to Provide a Reasonable Accomodation is Direct Evidence of Disability Discrimination.

The company, Dollar General, fired Linda Atkins after it refused to consider her request for a reasonable accommodation -- keeping some orange juice near her work station to ward off any hypoglycemic emergency caused by her diabetes. A jury awarded Atkins $27,565 in back pay and $250,000 in compensatory damages.

One argument raised on appeal by Dollar General was that the verdict erred and "that the verdict cannot stand because Atkins never produced evidence of animus towards the disabled." This went nowhere:

the [Americans With Disabilities] Act speaks in terms of causation, not animus. An employer violates the ADA whenever it discharges an employee "on the basis of disability" (a necessary requirement for liability), not only when it harbors ill will (a sufficient way of establishing liability). Imagine a company that fired a visually impaired employee to save itself the minimal expense of buying special software for her. Without more, that would constitute termination "on the basis of disability," even if all of the evidence showed that cost-savings, not animus towards the blind, motivated the company.

For additional discussion of this case: Denial of a Reasonable Accommodation of a Disability is Disability Discrimination.

Robert L. Abell
www.RobertAbellLaw.com

Failure to Provide a Reasonable Accomodation is Direct Evidence of Disability Discrimination

Once an employee with a disability covered by the Americans With Disabilities Act (ADA) requests a reasonable accommodation for that disability the employer has a duty to explore the nature of the employee's limitations, if and how those limitations affected his or her work, and determine what types of accommodations could be made. The employer and employee have a duty to in good faith discuss what sort of reasonable situation -- one that addresses fairly the problem(s) caused by the employee's disability -- can be worked out. An illustration of this process and the consequences for an employer that ignores this duty is found in the recent Sixth Circuit decision, EEOC v. Dolgencorp LLC. 

Linda Atkins, the employee, was diabetic, and she'd had some hypoglycemic episodes that had twice caused her hospitalization. She was also a good employee for Dolgencorp LLC, which we know as Dollar General store. Atkins had found orange juice was an effective response to ward off a hypoglycemic event - it acted quickly and was easy to measure. She adopted the practice of keeping some orange juice in a personal cooler in the store's breakroom.

Atkins was sometimes obliged to work alone in the store. In these instances and where there were  customers in the store, Atkins could not retreat to the breakroom and drink orange juice when he felt a hypoglycemic episode coming on. She asked her store manager if she could keep some orange juice at the register at the front of the store and was told that company policy forbade it.

So Atkins was stuck between a rock and a hard place: she couldn't go back to the breakroom and get to her orange juice, and the employer had said she couldn't keep the orange juice near her work station at the front of the store. Put in ADA terms, Atkins had requested a reasonable accommodation for her disability -- that she keep some orange juice accessible at the front of the store to ward off any hypoglycemic event and the employer had refused, citing policy.

Dollar General having refused a reasonable accommodation, Atkins was twice forced -- in instances where she sensed the onset of a hypoglycemic event -- to take and drink a bottle of orange juice from the store cooler, paying for it in full afterward. She reported these instances to her store manager.

A "shrinkage" investigation triggered Atkins' firing. Investigators interviewed Atkins, and she volunteered to them the two instances where she had taken, consumed and then paid for the orange juice in emergency situations. But these investigators could only see things in one way: they concluded Atkins had violated Dollar General's "grazing policy," which forbids employees from consuming merchandise in the store before paying for it, and so they fired Atkins.

A jury found for Atkins and awarded her $27,565 in back pay and $250,000 in compensatory damages. Dollar General appealed.

Dollar General's principal argument on appeal was that "it had a legitimate, nondiscriminatory reason for firing Atkins, namely the company anti-grazing policy." The argument amounts to this: we had a policy that applied to everyone and any employee that violated it would be fired, regardless of whether they had a disability or not; hence, it follows, Atkins' disability was not a factor in her firing. Nonsense, the Sixth Circuit concluded, and explained as follows:

But a company may not illegitimately deny an employee a reasonable accommodation to a general policy and use that same policy as a neutral basis for firing him. Imagine a school that lacked an elevator to accommodate a teacher with mobility problems. It could not refuse to assign him classrooms on the first floor, then turn around and fire him for being late to class after he took too long to climb the stairs between periods. In the same way, Atkins never would had had a reason to buy the store's orange juice during a medical emergency if Dollar General had allowed her to keep her own orange juice at the register or worked with her to find another solution.

A defendant may use a legitimate, nondiscriminatory rationale as a shield against indirect or circumstantial evidence of discrimination. But a neutral policy if of no moment when an employee presents direct evidence of discrimination. And failing to provide a protected employee a reasonable accommodation constitutes direct evidence of discrimination. Hence "failure to consider the possibility of reasonable accommodation for known disabilities, if it leads to discharge for performance inadequacies resulting from the disabilities, amounts to a discharge solely because of the disabilities.

The bottom line: Denial of a Reasonable Accommodation of a Disability is Disability Discrimination.

Robert L. Abell
www.RobertAbellLaw.com